Solana (SOL) faces declining institutional interest and weakening technical indicators.
Average Directional Index (ADX) falls below 25.0, signaling loss of trend strength.
Price consolidation between $175 and $126 likely, with potential for recovery if $175 breached.
Solana (SOL), once a darling of institutional investors, finds itself at a critical juncture as the third quarter of 2024 draws to a close.
The cryptocurrency’s recent price action and shifting investor sentiment paint a complex picture of its near-term prospects, challenging the sustainability of its previous uptrend.
Technical analysis reveals a concerning development for SOL bulls. The Average Directional Index (ADX), a key indicator of trend strength, has dipped below the critical 25.0 threshold.
This decline signals a major loss of momentum in Solana’s uptrend, potentially paving the way for a period of consolidation or even a reversal. Without a clear directional bias, SOL may struggle to mount a convincing recovery, leaving it vulnerable to increased selling pressure.
Source: TradingView Solana institutional interest shifts
Compounding these technical woes is a notable shift in institutional interest. Large wallet holders, who had previously shown robust support for Solana, appear to be scaling back their positions.
Data from CoinShares highlights this changing sentiment, with SOL recording a mere $100,000 in inflows for the week ending August 24 – the lowest among its peer group.
This tepid institutional appetite has contributed to substantial month-to-date outflows of $34 million, raising questions about SOL’s ability to attract and retain major investors in the current market climate.
Despite these headwinds, Solana’s price has managed to post a 24% gain over the past 20 days, bringing it to a current trading level of $161. The cryptocurrency now finds itself at a critical juncture, holding above the $156 support level while eyeing the formidable $175 resistance.
However, the confluence of waning trend strength and diminishing institutional interest could impede SOL’s ability to breach this key barrier.
Looking ahead, Solana’s price action is likely to be characterized by continued consolidation between $175 and $126.
